Countercyclical Fiscal Policy Can

question 22

Multiple Choice

Countercyclical fiscal policy can

• A) only be employed in reaction to an existing recession
• B) only be employed in reaction to an existing boom
• C) be employed to prevent a potential recession or boom or in reaction to an existing recession or boom
• D) only be employed to prevent a potential boom
• E) only be employed to prevent a potential recession.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price over a specific period.

Demand

The inclination and capability of buyers to acquire products and services at specified prices.

Increase

An upward movement in quantity, size, number, value, or intensity of a particular variable.

Market Demand

The total quantity of a product or service that all consumers in a market are willing and able to buy at various prices, given a period of time.